Companhia Brasileira de Distribuicao (PCAR3) Q1 2026 earnings summary

Executive summary

• Initiated and negotiated an extrajudicial recovery plan to address BRL 4.6 billion in unsecured non-operational debt, aiming for significant debt reduction and maturity extension, with over 57% creditor support and court approval pending.

• Management consolidation included experienced leadership and a board representing 75% of the shareholder base, supporting operational efficiency, cost reduction, and customer experience.

• Maintained operational continuity and customer experience during restructuring, focusing on cash generation and disciplined capital allocation.

Financial highlights

• Gross margin expanded to 30.4%, up 2.9 p.p. year-over-year, with gross profit rising 1.3% to R$1.33 billion.

• Adjusted EBITDA margin rose to 10.5%, up 1.9 p.p. year-over-year, with adjusted EBITDA reaching R$458 million.

• Operating free cash flow after CapEx increased 65.2% to R$522 million.

• Net revenue declined 8.2% year-over-year to R$4.37 billion, mainly due to the discontinuation of the Aliados format and portfolio changes.

• Adjusted net loss from continued operations was R$(333) million; reported net loss was R$(1,347) million, impacted by R$(1,014) million in non-recurring and non-cash effects.

Outlook and guidance

• Capex guidance for 2026 set between R$300 million and R$350 million, with Q1 investments at R$87 million.

• Efficiency plan targets at least R$415 million in annual cost and expense reductions, with R$99 million achieved in Q1.

• The recovery plan, once homologated, is expected to extend average debt maturity from 2.1 to 6.4 years and reduce average cost of debt to CDI + 0.5% per year.

• Pro forma net financial debt is projected to fall to BRL 822 million, a 74.3% reduction, with leverage dropping to 0.9x.

• No new store openings planned for upcoming quarters.